Wednesday, February 3, 2016

Rajan puts the ball in Jaitely's court


"If anything is certain, it is that I myself am not a Marxist."
—Karl Marx (German 1818-1883)
Word for the day
Cupidity (n)
Eager or excessive desire, especially to possess something; greed; avarice.
(Source: Dictionary.com)
Malice towards none
I support Maneka Gandhi's suggestion of a compulsory sex determination test on all fetus!
This should be followed up by appropriate counseling of would be parents and safety precautions for female fetus.
First random thought this morning
Jumping traffic signal is not just a minor legal offence. It is a manifestation of the total disregard for the right to a peaceful and safe existence.
It is no different from selling adulterated food and fake medicine; using infected devices in a hospital; leaving potholes and uneven road behind after digging the road for utility repairs; allowing people to travel on the roof of a train or bus; or simply killing someone in a fit of anger or over joy.
Disregard for others' right to safe and peaceful existence should carry strictest possible punishment and this law should be enforced earnestly.

Rajan puts the ball in Jaitely's court

With a strong backhand smash, Governor Rajan has put the ball forcefully in the government's court.
Like a good teacher, Governor Rajan gently patted on the back of the government and threw in couple of advices embalmed with a good deal of caution.
While appreciating the current momentum of growth as "reasonable", the governor highlighted that it is certainly below the potential and also below the medium term expectations.
Expressing concern over cooling growth drivers, he advised the government to "rekindle the growth drivers" to achieve a "durably higher growth trajectory".
Highlighting the challenges for the finance minister, the governor sought continuous improvement in the business environment to revive the private investments while continuing the fiscal consolidation efforts. The advise embalmed with caution went like this "Underlying growth drivers need to be rekindled to place the economy durably on a higher growth trajectory. The revival of private investment, in particular, has a crucial role, especially as the climate for business improves and fiscal policy continues to consolidate".
To rub off some Davos effect, the Governor did not forget to highlight the responsibility India bears to the global economy. Being one of few islands of stability in otherwise challenged world, India cannot compromise on its commitment to financial stability, fiscal discipline and sustainably faster growth.
Reiterating his commitment to objectivity and transparency in decision making, the governor made it clear that his monetary policy action would be guided by the path of inflation and structural reform measure in the forthcoming Union Budget that would boost growth while maintaining the fiscal discipline. The operative words of the policy statement, in my view, are the following:
"The Reserve Bank continues to be accommodative even as it leaves the policy rate unchanged in this review, while awaiting further data on the development of inflation. Structural reforms in the forthcoming Union Budget that boost growth while controlling spending will create more space for monetary policy to support growth, while also ensuring that inflation remains on the projected path of 5 per cent by the end of 2016-17."
The following cautionary statement notwithstanding:
"For 2016-17, growth is expected to strengthen gradually, notwithstanding significant headwinds. Expectations of a normal monsoon after two consecutive years of rainfall deficiency, the large positive terms of trade gain, improving real incomes of households and lower input costs of firms should contribute to strengthening the growth momentum. Yet, still weak domestic private investment demand in a phase of balance sheet adjustments, re-emergence of concerns relating to stalled projects, excess capacity in industry, sluggish external demand conditions dampening export growth could act as headwinds."

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